Niall Iain MacFirbhisigh (as Curator of Barry Lionel Ching) v C.I. Trustees and Executors Ltd

JurisdictionJersey
CourtRoyal Court
JudgeMatthew John Thompson,Hunt
Judgment Date07 September 2016
Neutral Citation[2016] JRC 2A,[2016] JRC 156
Date07 September 2016

[2016] JRC 156

ROYAL COURT

(Samedi)

Before:

Advocate Matthew John Thompson, Master of the Royal Court

Between
Niall Iain MacFirbhisigh (as Curator of Barry Lionel Ching)
First Plaintiff
Barbara Mary Marvell Ching
Second Plaintiff
and
C.I. Trustees and Executors Limited
First Defendant

and

Steven Gidley
Second Defendant

and

Gary Killmister
Third Defendant

and

Kevin Manning
Fourth Defendant

Advocate J. Garrood for the Plaintiffs.

Advocate C. J. Scholefield for the First and Third Defendants.

Authorities

MacFirbhisigh and Ching v CI Trustees and Executors & Ors [2016] JRC 002A.

MacFirbhisigh and Ching v CI Trustees and Others [2015] JRC 233.

Crociani v Crociani [2014] (1) JLR 503.

Mars UK Limited v Teknowledge Limited [1999] 2 Costs L.R. 44.

Trust — reasons for ordering payment on account of costs in favour of the defendants.

CONTENTS OF THE JUDGMENT

Paras

1.

Introduction

1

2.

Background

2–10

3.

Parties' contentions

11–17

4.

Decision

18–35

THE MASTER:
Introduction
1

This judgment represents my detailed written reasons for ordering a payment on account of costs in favour of the defendants.

Background
2

The plaintiffs' application arises out of an order for costs made by Commissioner Hunt in this matter reported at MacFirbhisigh and Ching v CI Trustees and Executors & Ors [2016] JRC 002A (the ‘costs judgment’) following the handing down of the substantive proceedings reported at MacFirbhisigh and Ching v CI Trustees and Others [2015] JRC 233 (the ‘main judgment’).

3

In the costs judgment the defendants were awarded their costs on the indemnity basis. The act of court of 6 th January, 2016, also stated:-

“The award of such costs in the amount at which they are taxed pursuant to Rule 12/3 of the Royal Court Rules 2004, as amended, to be enforceable by the Viscount as a judgement debt without further order in accordance with the provisions of that Rule.”

4

A copy of the act of court of 6 th January, 2016, was delivered to the Public Registry for registration on 18 th January, 2016.

5

On 1 st April, 2016, the plaintiffs submitted its claim for costs for taxation in the sum of £406,927.99 plus disbursements of £58,917.79 totalling £465,845.78.

6

Objections were received from Carey Olsen for the plaintiffs by a letter dated 3 rd May, 2015.

7

Due to the length of time the taxation process was going to take, by an email dated 20 th June, 2016, Advocate Baxter sought a payment of £155,000 on account of costs being just under one third of the amount claimed.

8

By a letter of 29 th June, 2016, Carey Olsen reply stated “We are instructed that our clients do not consent to any order providing for a payment on account of your clients' costs. Further, you should note that the date hereof our clients are not possessed of sufficient liquid assets in order to comply with any order which might be made.”

9

In the same letter Advocate Garrood stated “…any such application should properly be made to the Royal Court.”

10

In an email dated 27 th July, 2016, Advocate Garrood consented to the defendants' application being heard before me rather than before the Royal Court.

Parties' Contentions
11

Advocate Scholefield indicated that there were three matters of principle I had to consider:-

  • (i) Should a successful party be paid;

  • (ii) How much should a successful party be paid; and

  • (iii) How is an order of the court turned into cash?

12

He contended it was clear by reference to the decision of the Court of Appeal in Crociani v Crociani [2014] 1 JLR 503 that there was no basis not to pay the successful party an interim payment. The time for an appeal had long since passed. His clients were out of pocket and wanted to recover costs they had paid to his firm, his clients having successfully defended the claim. At present, while costs had been ordered to be a judgment debt by reference to the act of the court dated 6 th January, 2016, that debt was contingent upon the taxation process being completed. There was no debt until either taxation was completed or an interim payment ordered.

13

While the court had to take a cautious approach, where indemnity costs are being ordered only around 10% of costs claimed would be disallowed on taxation and all he was asking for was around 50%. Therefore there was no danger of any over payment. Without any order, there was a risk of injustice to his clients because of the length of time a detailed taxation would inevitably take. It did not matter whether the interim payment was sought from the trial judge or at a later date. The principle in the case of Crociani was clear.

14

He accepted that a payment on account could have been asked for when submissions were made on costs, but that did not prevent making an order at this stage because the principle still applied that a successful party should not be kept out its money.

15

Advocate Garrood firstly contended that I could not vary the order made by Commissioner Hunt on 6 th January, 2016. Commissioner Hunt had ordered that taxation should take place and it was not open to me to reopen that decision. The application could have been made at trial but was not. Commissioner Hunt as the trial judge would have been best placed to assess what an appropriate interim payment would be and to take a cautious approach. I was not in the same position because I had not been present at trial. I could not therefore form a realistic view as to what an interim payment should be or what was likely to be recoverable on a taxation and what is not. Any order would be in effect guesswork.

16

Even if the matter had been referred back to Commissioner Hunt he was now not in a position to assess a figure because of the time that had since passed. The matter therefore had to proceed to taxation.

17

Advocate Garrood also explained that the costs order could not be met because there were insufficient assets. By reference to the third affidavit of Mr MacFirbhisigh I was informed that the main asset was a property which was going to be sold against which there were already secured charges for loans were borrowed by the plaintiffs for legal funding in the round sum of £230,000. His firm which had been appointed on legal aid was also significantly out of pocket. There was nothing therefore to pay the defendants once existing secured creditors had been paid.

Decision
18

I start by reference to whether or not I have power to order an interim payment. The principle of ordering payments on account for costs was considered in Crociani v Crociani [2014] 1 JLR 503 at paragraphs 16 to 20 as follows:-

“16 In my view, the achievement of justice, to which all exercises of discretion under procedural rules aspire, would usually require that a party who is, pursuant to a court order, entitled to his costs, should be paid on account a percentage of the amount he is likely to recover on taxation calculated on a conservative basis to avoid any real risk of overpayment . [Emphasis added]

17 This conclusion is consistent with and supported by the jurisprudence in England and Wales at a time before the CPR contained its present presumption .

18 In Mars UK Ltd. v. Teknowledge Ltd. (8)-the first relevant decision-Jacob, J. identified the principle in this way ( [1999] 2 Costs L.R. at 46–47):

“I now turn to the second issue, whether or not there should be an order for interim payment. The first thing to do is to consider what the general rule should be, interim payment or not. There is no guidance given in the Rules other than that the court may order a payment on account. There is no guidance in the Practice Direction. So I approach the matter as a question of principle. Where a party has won and has got an order for costs the only reason that he does not get the money straightaway is because of the need for a detailed assessment. Nobody knows how much it should be. If the detailed assessment were carried out instantly he would get the order instantly. So the successful party is entitled to the money. In principle he ought to get it as soon as possible. It does not seem to me to be a good reason for keeping him out of some of his costs that you need time to work out the total amount. A payment of some lesser amount which he will almost certainly collect is a closer approximation to justice. So I hold that where a party is successful the court should on a rough and ready basis also normally order an amount to be paid on account, the amount being a lesser sum than the likely full amount .” [Emphasis added]

His...

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